BYD Earnings Crush EV Competition

China’s EV giant BYD, which may have topped Tesla as the world’s largest EV company, posted extraordinary earrings. According to The Wall Street Journal, “The Chinese EV maker said Friday that its net profit surged to 9.15 billion yuan, equivalent to $1.26 billion, from 4.57 billion yuan a year earlier.” That was at the top end of its guidance.

The news should create anxiety about Tesla, legacy car companies like GM and Ford, and several South Korean, Japanese, and German companies. While their gas-powered car sales remain strong, EV sales are weak despite billions of dollars in investments.

BYD Self-Driving

BYD also claims to have the most advanced self-driving features in the world, called “God’s Eye.” However, the claim is not conclusive. Self-driving options are considered the next major catalysts for creating demand for EVs.

BYD competitors’ only comfort is that tariffs have kept its cars out of the US and much of Europe. That is good because BYD manufactures high-quality cars and sells them for less than half of what Tesla does. BYD has started to get around this by moving into South America and Asia. However, China is by far the largest EV market in the world and can do well even if most of its sales are there.

Another question about BYD’s future is whether the Chinese government will support its expenses. This is one reason for the tariffs. It also raises the question of what would happen if the Chinese government pulled back.